Should You Pay for Your Child’s College Education?
College keeps getting more expensive. According to the College Board, in 2016-17, the average cost of a year at a public four-year college – including tuition, fees, room, and board – was $20,090 for in-state students and $35,370 for out-of-state students. At private, nonprofit colleges, the average cost was a whopping $45,370 per year. At those prices, it’s no wonder a 2015 Gallup poll found that over 70% of parents say their single biggest financial worry is how to pay for their children’s college education.
But perhaps all those parents are worrying about the wrong thing. Maybe the question they should really be asking is whether they should pay to put their kids through college at all.
Between the high price of a degree and the uncertain job market, some parents these days are questioning whether a college education is worth the cost. And even when parents do choose to send their kids to college, some experts say the students are more likely to succeed if their parents don’t foot the bill for it.
Many parents assume that putting their kids through college is the best way to start them out on a successful, prosperous life. And indeed, there’s a lot of evidence to show that a college education has big benefits.
Here are a few of the arguments in favor of paying for your kids’ college education:
Although a college education offers many advantages, it also comes with a high cost. And surprisingly, picking up the tab for your children’s education poses risks not just for you, but for them as well.
Here are some of the drawbacks of paying your kids’ way through college:
Many parents struggle to pay for their kids’ college, but they don’t see what the alternative is. They think that a college degree is the key to success for their children, and they don’t see any other way to make sure they attain it.
However, there are many ways students can carry the cost – or at least part of the cost – of their own education. There are also career paths that can allow them to go to college for free, or even skip college completely. Here are a few alternatives to consider before deciding to foot the bill for your kids’ education on your own.
Students can pay a big chunk of their education costs by having a job in college. Many colleges offer on-campus jobs through work-study programs, but there’s a limited number of jobs to choose from, and most pay only minimum wage. Some students find they can make more with a part-time job off campus, such as waiting tables. Students can also earn money through a side business, such as tutoring, which lets them set their own work hours.
It’s unlikely students can earn enough to cover all their college costs while also studying full-time. Experts generally recommend that students work no more than 10 to 15 hours per week. At the federal minimum wage of $7.25 an hour, that comes to between $2,175 and $3,622.50 over the course of a 30-week school year.
However, the net price of a year of college – that is, the total cost of tuition, fees, room, and board, minus any aid from grants and scholarships – is much higher than that. A 2016 study by Demos found that the average net price of college for low-income students ranges from $6,152.25 per year in Hawaii to $13,489.75 per year in New Hampshire. So, at best, a student’s earnings can only cover a little more than half the cost.
Fortunately, there are ways for students to increase that income. For one, they can earn more money during the summers. If they work 40 hours a week for 13 weeks, a summer job can bring in an extra $3,770, even at minimum wage. Adding that to their earnings during the school year could get them over the net price for college in some states.
Another alternative for students is to work more hours and take classes only part-time. According to the U.S. Department of Education, 22% of students at four-year colleges, and 61% at two-year colleges, are part-time. The obvious drawback of this approach is that it will take longer to earn their degree. On the plus side, it offers at least a chance of paying all the bills out of their earnings and graduating debt-free.
Students can also contribute to their own college costs through financial aid, which makes college more affordable. Financial aid comes in two main forms: Gift aid, including grants and scholarships, is money the college gives you that reduces the amount you pay; self-help aid just makes it easier for you to pay for college with your own money.
Gift aid can reduce the cost of college quite a bit. The College Board reports that in 2014-15, the average in-state price for a four-year public college was $9,410 per year. However, the average net price, after gift aid, was only $3,980. Self-help aid, including loans and work-study jobs, can pay for the rest.
Aid can also be need-based or merit-based. Need-based aid, such as grants, depends on how much your family can afford. If your income is low, you can get more financial aid.
Merit-based aid, such as scholarships, usually depends on the student’s abilities. Students can get scholarships for having good grades, high test scores, or some special talent, such as art or sports. This means your children can help pay their own college costs by working hard in school, getting good grades, and honing their talents.
Students can also keep their college costs down by choosing a school that’s more affordable. One common choice is to go to a community college for the first two years. At these schools, Demos found, the average net price is typically lower, ranging from $4,188 to $15,149 per year.
Students can lower their costs even more by living at home while attending a community college. That way, they only need to pay for tuition and fees, which cost an average of $3,440 per year, according to the College Board. That’s well within the amount students can earn through part-time and summer work.
Some colleges aren’t only affordable; they’re actually free. All across the country, there are colleges that offer free tuition – and sometimes room and board as well – to students who meet their strict criteria.
The best-known free colleges are the military service academies, such as West Point and the U.S. Naval Academy. At these government-funded schools, all students attend free of charge. In exchange, they pledge to serve five years in the military after they graduate.
Other free colleges, such as Berea College in Kentucky and the College of the Ozarks in Missouri, require students to work on campus in exchange for tuition. Still others offer free tuition to students who want to train for a specific field, such as music, the ministry, or naval engineering. And in several states, community colleges offer two years of education for free to any student whose grades are good enough.
Parents often knock themselves out paying for college because most high-paying jobs these days require a college degree. However, there are some notable exceptions to this rule. According to the Bureau of Labor Statistics, fields that can offer a high salary without a college degree include:
Most of these jobs require only on-the-job training. For a few, such as elevator installation and repair, you must complete an apprenticeship – a period of intensive training lasting one to six years. During this time, you earn only a modest wage for your work, but it’s still a lot cheaper than paying for four years of college.
Even in white-collar fields like accounting and computer science, many companies no longer require their workers to have a college degree. Glassdoor reports that tech giant Google, publisher Penguin Random House, major accounting firm Ernst & Young, and numerous others are now offering high-paying jobs with no degree required.
As you can see, paying for college isn’t the only way to help your kids get off to a good start in life. To figure out whether it’s the best choice for your family, there are several questions you need to consider.
Experts warn against putting your own future at risk for the sake of your children’s. Before you put even one dollar into college savings, they say, you should make sure you’re meeting your own financial needs. That means having at least three months’ worth of income in an emergency fund and meeting the required payments on your mortgage and other debts.
You also need to make sure you’re saving enough for retirement. Experts say to err on the side of caution with this, since you could be forced to retire early or spend more than you expect in retirement. Only when you’re confident all these needs are covered should you start setting aside money for college costs.
If you have – or plan to have – more than one child, you need to think about all of them when planning for college. Otherwise, you risk stretching yourself thin to set aside college savings for your first child, only to find there’s nothing left when the second kid comes along.
Figure out how much you can reasonably afford to put aside each month for college savings, then divide that up fairly among all your children. If that leaves only a small amount for each one, it’s better to know that up front so you’ll have the right budget in mind when it’s time to start looking at colleges.
Even if you’ve already saved up money to send your kids to college, that doesn’t necessarily mean it makes sense to spend it that way. College is only a good investment if your kids will use that degree to pursue a career where it really makes a difference.
A college degree is a bigger advantage in some fields than in others. Health care jobs, such as pharmacy and nursing, have lots of job openings for new graduates. Engineering and agriculture majors, and some education majors, are also likely to get good jobs, according to Kiplinger.
But other majors, such as literature and the arts, don’t offer a clear route to a high-paying job. Your child could spend four years at college only to end up working in retail anyway. If your child is passionate about art, perhaps they could redirect that passion into a more lucrative field like art education. However, if they won’t even consider a degree that could pay for itself, maybe college isn’t a good investment.
Remember, too, that some careers don’t require a degree. If your child is drawn toward hands-on work, such as auto repair, maybe a trade school or an apprenticeship would be a better value. A military career can start right after high school or with a free education at one of the service academies.
Before you start shopping for colleges with your teen, think about whether they’re ready for it – both academically and emotionally. Many students find the work at college is too challenging, and the distractions of student life are too great. A report from the National Student Clearinghouse Research Center found that only a little more than half the students who started college in 2009 had earned a bachelor’s degree by 2015. Before you invest money in tuition, it’s worth considering whether your child has what it takes to see college through to graduation.
For some teens, it might make sense to spend a year working before they start college. This lets them contribute financially and also teaches them to be more responsible with money. Learning the value of a dollar can also make them more willing to consider a reasonably priced school when the year is up.
Another option is for teens to start out by taking classes at a community college. This cuts the cost and gives your kids more time to mature. After two years, they can transfer to a four-year school to finish their degree. And if they decide after a year or two that college isn’t for them, at least they’ll have learned that lesson fairly cheaply.
Even if you’re sure your kids are ready for college and you’re ready and able to pay, that doesn’t mean you have to bear the cost yourself. It’s always worth looking into scholarships and financial aid to help offset the cost.
You can apply for need-based aid by filling out the Free Application for Federal Student Aid (FAFSA). Experts say it’s worth doing this even if you don’t think you’ll qualify. Having a completed FAFSA can make it easier to apply for scholarships and other merit-based aid.
Free colleges are another option worth looking at. These schools generally cater to a very specific group of students, so chances are your kids won’t qualify. But if your child happens to fit the guidelines for one of these schools, it could offer a top-notch education at no cost to you.
If you’ve decided that paying for your kids’ college is the right move for your family, the next question is how to do it. Experts recommend these moves for parents saving for college:
Paying for your kids’ college education doesn’t have to be an all-or-nothing matter. It’s perfectly reasonable to figure out how much you can afford to contribute, and let them decide how to raise the rest of the money. For instance, they could decide to go to a community college for the first two years so that your contribution is enough to cover their full expenses. Or, if they want to go to a more expensive school, they could try to make up the difference in price with a combination of work and scholarships.
In fact, even if you can afford to pay for an expensive college, there’s something to be said for asking your kids to contribute part of the cost themselves. Having a scholarship forces them to keep their grades up, while having a part-time or summer job helps teach them responsibility. This means they’ll leave college better prepared for the real world than their classmates who just took their parents’ money and spent four years having fun.
Did your parents pay your way through college?
Categories: Careers, College & Education
Amy Livingston is a freelance writer who can actually answer yes to the question, “And from that you make a living?” She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.
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Should You Pay for Your Child’s College Education?
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